Abstract:

Enhancing patient capital is crucial for China to accelerate the development of high-quality productive forces and foster a positive cycle of “science and technology–industry–finance". Patient capital represents long–term financial investments in high-tech companies, where investors prioritize long-term benefits over short-term profits. From a historical perspective, the formation of patient capital is driven by three key factors: First, a new wave of technological innovation has created an urge demand for patient capital among tech firms. Second, the state has lowered the entrance barrier and risks for industrial innovations. Third, reforms of the financial system have supplied stable funding sources for patient capital. Patient capital will contribute significantly to the Chinese economy by driving the forces of production, achieving multiple policy objectives, and restoring the macroeconomy by promoting the general rate of profit. To develop patient capital, China should create favorable conditions for industrial innovations and mobilize various sources of funding from governments, state-owned enterprises to private capital. Also, it is essential to be mindful of the speculative nature of profit-driven venture capital. Caution should be exercised to prevent a firm growth model characterized by “Promote monopoly through expansion, and boost valuation through monopoly".

Key words:

patient capital, venture capital, digital economy era, tech firms; political economy